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The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community <br />engagement that encourages and inspires prosperity <br /> <br /> <br />Request for Action <br /> <br />To <br />Economic Development Authority <br />Item Number <br />7.2 <br /> <br />Meeting Date <br />May 20, 2024 <br />Prepared By <br />Joshua Mollan, Economic Development Specialist <br /> <br />Item Description <br />Heritage Millwork Energy Incentive Program <br />Reviewed by: <br />Brent O'Neil <br />Cal Portner <br /> <br />Action Requested <br />Adopt, by motion, a recommendation of approval of the Heritage Millwork Energy Incentive application to the <br />City Council. <br /> <br />Background/Discussion <br />In addition to its TIF and microloan applications, Heritage Millwork has also applied for the Economic <br />Development Energy Incentive Program. This program offers savings to qualified applicants on their Elk River <br />Municipal Utilities (ERMU) electric bills for up to two years. The total incentive provided to the applicant shall <br />not exceed $149,999. Project Hinge meets all the requirements set forth in the policy: for-profit corporation, <br />partnership limited liability company, or sole proprietorship; new construction, expansion, or addition project; <br />located within eligible ERMU electric service territory within the City of Elk River; peak electric demand <br />greater than 50kW per month; minimum new job creation of 30 FT employees within two years; wage level <br />greater than $18/hr; project size greater than 25,000 sq ft; Implan (analysis provided by Sherburne County) <br />calculated economic output greater than $5,000,000; and total annual property taxes of at least $60,000. <br /> <br />This program is new and this project is the first applicant for the program. The program allows the city to <br />rebate the PILOT (Payment in Lieu of Taxes) which is charged to electrical customers. The 4% fee is eligible <br />for a full rebate for 24 months following a project's certificate of occupancy. EDA review is required prior to <br />forwarding it to the City Council for consideration. Based on the project's ability to satisfy the requirements <br />of the Energy Incentive Program Policy, staff recommends supporting this application, and recommending <br />approval to the City Council. <br /> <br />Financial Impact <br />Based on anticipated electricity usage, the value of the incentive will be $10,000 to $15,000 in the form of a <br />rebate. <br /> <br />Mission/Policy/Goal <br />Attract new business development to Elk River to build the City's economic vibrancy, job offerings, and tax <br />base. <br /> <br />Attachments <br />Page 54 of 64